Analysis Report: Exhaust Systems (Japanese Market)

Go to Exhaust Systems (U.S. and European Markets)

  Against the backdrop of increasingly stringent global regulations, there is understandably a growing need for clean and eco-friendly engines that reduce CO2 emissions, improve fuel efficiency, and reduce harmful emissions such as HC, NOx, CO. To meet these needs, automakers and their suppliers are actively engaged in activities to reduce the weight of parts, improve fuel efficiency and improve exhaust gas purification performance. For engine performance, which is directly related to fuel efficiency and exhaust emissions, it is essential to improve the performance required of exhaust system components as well as to improve lubrication systems, motor systems, and to optimize combustion control.

  Emissions regulations become more stringent in Japan in 2018, but air pollution such as fine particulate matter (PM2.5) has become an issue in China as well. Under the current "China 5" emissions regulations, NOx is already regulated at 60 mg/km, the same level as in Europe. Furthermore, the next "China 6b" emission standards will come into effect across China in 2023, but the NOx limit will be halved to 30mg/km, becoming the most stringent in the world. The regulations have already begun to be implemented early in major cities, including Shanghai, starting with Guangdong in January 2019.

  These stricter regulations are expanding business in the short term for Japanese, European and U.S. catalyst manufacturers, who are leading the way in emissions control measures ahead of Chinese parts manufacturers.

  However, in the long term, the development of eco-friendly vehicles such as hybrid vehicles (HVs), plug-in hybrid vehicles (PHVs), and electric vehicles (EVs) is advancing at a rapid pace among all automakers and suppliers. This is having a significant impact on the business of exhaust system parts manufacturers and forcing them to closely monitor these trends while developing exhaust systems and parts for next-generation eco-friendly vehicles and developing new businesses. Each company is seeking to diversify into body parts, chassis parts and electrification parts.

Conversely, exhaust systems include a catalytic converter, which is directly related to the purification of exhaust gases. To improve catalytic converter performance, the optimum catalytic effect and back pressure (exhaust side pressure) these must be designed in for each engine installed. The design of the exhaust pipes and tubes including muffler/silencer, catalytic converter shell shape, exhaust manifold tube length, branching shape, internal wall condition, and heat capacity of the exhaust path are also important design considerations within the limitations of the vehicle's underfloor layout.

1) Various parts of the exhaust system covered in this report

• Exhaust pipe (*)
• Muffler (*)
• Catalyst substrate
• Catalyst coating
• Catalytic Converter/Canning

(*) Unless otherwise specified, exhaust pipes/tubes are referred to as "exhaust pipes" and mufflers/silencers as "mufflers".

Exhaust system components not covered in this report:

• Exhaust manifold
• O2 sensor
• Diesel catalytic converters (including SCR systems)
• DPF (Diesel Particulate Filter)
• Catalytic converter parts such as support materials
• Exhaust system components for medium and large commercial vehicles

A description of the exhaust system components covered in this report is as follows:

• Exhaust pipe: The exhaust pipe connects the exhaust manifold and the muffler. Aluminum steel tubing was often used in the past, but stainless-steel tubing is increasingly being used for the purpose of weight reduction and to improve corrosion resistance.
• Muffler: The muffler is a device that attenuates sound energy in the exhaust passage through acoustic effects such as resonance and dampening, and it reduces exhaust noise by using sound-absorbing materials.
• Catalyst substrate: The base on which the precious metal catalyst material is affixed. For automotive applications, usually the substrate is a dense honeycomb structure. Usually alumina is used as a substrate for catalysts because it inherently has a high melting point and is chemically stable with high thermal conductivity. However, metal substrates are becoming more common because ceramic substrates have the disadvantage of being weak with regards to impact resistance.
• Catalyst coating: The catalyst is made by applying a washcoat of precious metals to the substrate. The washcoat, which serves as the carrier for a porous refractory oxide layer made from an acidified aqueous slurry of precious metals, is applied to the substrate, then dried and calcified.
• Catalytic Converter / Canning: When mounted under the floor or directly below the exhaust manifold, the catalytic converter with its robust outer shell can withstand the harsh environment created by engine vibration, road vibration, flying stones, etc. The catalyst is press-fitted into the converter shell using a process called canning. After the canning process, the catalytic converter assembly is fitted to the exhaust pipe and exhaust manifold by means of flanges or welds. This report addresses the final product of the shell and canning process to yield the completed catalytic converter assembly and is referred to as "catalytic converter / canning".

2) Supplier business development situation

• Currently the five largest exhaust system suppliers in the world include Faurecia of France, Tenneco of the U.S., Eberspaecher of Germany, and the Japanese suppliers Futaba Industrial and Sango. Exhaust system components installed in vehicles manufactured in Japan usually include large parts such as exhaust pipes that are long and more easily produced and supplied locally, mainly by Japanese suppliers. Excluding suppliers of catalyst substrates and coating, the major Japanese suppliers of exhaust systems include suppliers such as Futaba Industrial and Sango for the Toyota group, Marelli Corporation (Formerly Calsonic Kansei Corporation) for Nissan, and Yutaka Giken and Sankei Giken for Honda. Because larger parts are often included as exhaust system components, the manufacturing facilities of Japanese exhaust system suppliers are often located near the assembly plants of their affiliated OEM customer.
• Suppliers of catalyst substrates and coatings tend to be more specialized, independent suppliers distinguished along the lines of whether it involves a ceramic substrate where the precious metal washcoat is dried and calcined (or metal encapsulated), or made with metal substrate coatings, with the exception of suppliers who are OEM affiliates such as Marelli Corporation (formerly Calsonic Kansei Corporation; metal substrate), Denso (ceramic substrate), and Cataler (ceramic substrate). Japanese suppliers of ceramic substrates include NGK Insulators and Corning, and for metal substrates suppliers such as Nippon Steel Chemical & Material. Substrate suppliers that involve JVs include N.E. Chemcat, Umicore Shokubai, Tokyo Roki, Mitsui Mining and Smelting, and Johnson Matthey of the UK. Also, another supplier of ceramic substrates would be the in-house capability of Nissan, although the annual production capacity is less than 100,000 units per year.
    Because catalysts are smaller than exhaust pipes, manufacturing sites do not necessarily need to be located near the vehicle assembly plant from a logistics or manufacturing perspective. In some cases, the catalyst is delivered to an OEM by a supplier on a Tier 1 supply basis, but usually it is delivered on a Tier 2 supplier basis to the Tier 1 exhaust system supplier who packages the substrate by canning to deliver a completed catalytic converter assembly.
• In Europe and the U.S., many Japanese suppliers have formed joint ventures or alliances with major competitors such as Faurecia in France, Tenneco in the U.S., and Eberspaecher in Germany. Since the late-1980s, suppliers have proactively increased their overseas footprint as they follow the localization efforts of their OEM customer base, which was led by localization in the U.S. From 2000 onwards, many suppliers have aggressively expanded their local footprint in China by establishing joint ventures or alliances with local suppliers. Furthermore, suppliers are also active in expanding their operational footprint in developing countries such as India and Brazil.
• In recent years, suppliers are restructuring their overseas footprint with the aim of optimizing business operations and increasing production capacity. Most of the overseas facilities of the Japanese suppliers continue to be faced with the challenge of increasing business with non-Japanese OEM. Meanwhile, OEMs are looking for end-to-end system suppliers, from the hot end (exhaust manifold, catalytic converter) to cold end (muffler), who are capable of designing, manufacturing and supplying entire exhaust systems.
• Recent changes in purchasing trends include the adoption of catalytic converters for the 2019 Lexus UX for Toyota by Aisin Takaoka, whose main business is casting. Hirotec, Mazda's main supplier of exhaust systems, is also expanding its exhaust parts sales channels to Toyota, Nissan, and Subaru.

Manufacturing (M) and R&D (R) facilities of key exhaust system parts suppliers by country:

Note: Only the facilities related to the following exhaust system components have been captured in the above table: exhaust system, exhaust pipe, muffler, exhaust manifold, catalyst, and DPF (Diesel Particulate Filter).

3) Major partnerships / joint venture relationships:

Exhaust system suppliers:

Sango

Business overview :

• A Toyota group supplier, Sango Co., Ltd. has a long history of doing business with Toyota dating back to 1937, long before the merger of Toyota Motor Co. with Toyota Motor Sales to become the Toyota Motor Corporation in 1982. Sango primarily manufactures pressed auto parts for the exhaust system, body parts, chassis parts, etc. Among these products, Sango began the production of exhaust system components in 1954 and this product line now consists of 35 key products, accounting for over 70% of the company's total sales.
• With sales of approximately JPY 404.5 billion and 7,031 employees (consolidated; for the fiscal year ended March 2019), Sango is Japan's leading exhaust system parts supplier.
• Products: In addition to exhaust pipe, muffler, and catalytic converter / canning as covered in this report, Sango also manufactures products such as a urea SCR (selective catalytic reduction) exhaust aftertreatment system integrating the exhaust manifold and DPF (Diesel Particulate Filter).
• Customers: Sango components are used on many models in the Toyota and Daihatsu lineups, especially for muffler where Sango holds the largest share among muffler suppliers. In addition to Toyota, Sango also supplies exhaust system parts to other major OEMs such as Nissan and Honda. In the case of their primary customer Toyota, depending on the vehicle model, the sharing ratio for exhaust system parts procurement is sometimes allocated between Sango and Futaba Industrial. In this case, oftentimes Sango is awarded the volume for 2WD models and Futaba Industrial is awarded the volume for the 4WD models.

Development-related :

• Sango is a market leader in heat collectors that recover exhaust heat. From 2010, Sango’s 2nd generation heat collector has been adopted for the exhaust system of the Toyota Highlander-HV, Lexus CT200h, Prius α, and Aqua. The third generation was adopted for the new Prius. In addition, it is equipped on the Kia Niro.

Manufacturing-related :

• Sango has four sites in Japan for the manufacturing of exhaust system components. In Asia, it has a total of 7 manufacturing sites: three in China, two in Thailand, one in India, and one in Indonesia. In Europe and the U.S., Sango has a total of 5 manufacturing sites, one in Turkey, three in the U.S., and one in Canada. In addition to these, Sango has technical assistance locations in Europe, the U.S., and Asia.

Futaba Industrial

Business overview :

• Futaba Industrial Co., Ltd. is one of the leading suppliers of exhaust system components in Japan, with Toyota Motor Corporation as the largest shareholder, owning approximately 31% of the company. Futaba Industrial manufactures products such as exhaust system, body, and chassis components, with automotive stamped parts as its core products.
• The company has sales of approximately JPY 476.2 billion (for the fiscal year ended March 2020) and 10,590 employees (as of March 31, 2019). Exhaust systems accounted for 34% of consolidated sales, making the company the second largest supplier of exhaust systems after Sango.
• The company's main source of sales is auto body parts, with Japan domestic sales accounting for 58% of total sales, followed by North America at 23% and Asia, including China, at 17%.
• Products: Futaba Industrial’s exhaust system components, like Sango, include exhaust pipes, mufflers, catalytic converters / canning, as well as exhaust manifolds and Diesel Particulate Filters (DPF). In addition, Futaba Industrial has also commercialized the “POWEREV” exhaust heat recovery device, which recovers heat emitted from the exhaust gas to help warm up the engine by raising the temperature of the engine’s coolant, increasing heating efficiency. The POWEREV system was first adopted by Toyota for the Estima Hybrid (AHR20W type) released in 2006, followed by its adoption in hybrid vehicles such as the Toyota Prius (NHW20 type) and the Mazda Axela (BY type) for cold region specification vehicles. Futaba is targeting to have the POWEREV system adopted for non-hybrid vehicles that improves fuel economy by reducing the size and weight of the exhaust system and increasing heat exchange efficiency. Going forward, in addition to conventional exhaust system components, competition between Sango, Yutaka Giken, and Futaba Industrial is expected to increase for exhaust heat recovery equipment.
• Customers: In addition to Toyota and Daihatsu, Futaba Industrial also supplies exhaust system components to other major OEM such as Nissan, Mitsubishi, and Suzuki. As mentioned in the section above on Sango, Futaba Industrial and Sango are competing rivals for business both inside and outside of the Toyota group. In the case where Toyota assigns a sharing ratio for the same model between Sango and Futaba Industrial, oftentimes Sango is awarded the volume for the 2WD version and Futaba Industrial is awarded the volume for the 4WD version.

Development-related :

  Futaba Industrial recognizes that measures will be required to handle global trends such as increasingly stringent emissions regulations, and an increase in the number of HVs, PHVs, and EVs. By focusing on value-added improvements in its exhaust system development activities, Futaba is aiming to realize the development of exhaust systems that can meet the demands of next-generation green vehicles, and Futaba is working to increase the sales of these systems in North America and China.

Manufacturing-related :

• In Japan, the company has six exhaust parts manufacturing sites, including its subsidiary in Kyushu. In Asia, Futaba has been manufacturing exhaust components at its plants in Indonesia and China, and in North America it has two plants that supply exhaust manifolds and exhaust pipes. In Europe, the company supplies exhaust pipes from its plant in the Czech Republic.
• In February 2018, the company announced that it decided to sell its subsidiary, Chongqing Futaba Automotive Parts Co., Ltd., to a local supplier, Skyman Auto Chassis (Wuhu) Co., Ltd. (formerly Wuhu Tianren Chong Welding Co., Ltd.), in order to focus on improving the product selection and business focus of the subsidiary, Chongqing Futaba Automotive Parts Co., Ltd., which was established in December 2012. After the sale, Futaba Industries now has seven manufacturing sites in China.
• In June 2018, the company announced that it would merge the manufacturing operations of its UK auto parts subsidiaries, Futaba Industrial UK Ltd. and Futaba Manufacturing UK Ltd., effective December 31, 2018. The surviving company is Futaba Manufacturing UK Ltd., with combined sales of approximately JPY 11 billion yen for the two companies.

Marelli (formerly Calsonic Kansei)

Business overview :

• Marelli Corporation is a Nissan-affiliated parts supplier, with Nissan Motor being the largest shareholder with an approximately 40% stake. (84.1% of its sales are to the Nissan Group.) In March 2017, the parent company was transferred from Nissan to the investment fund Kohlberg Kravis Roberts (KKR) Group. And, in March 2017, KKR set up a special purpose company, CK Holdings Co., Ltd. (CKH), to make a tender offer bid for the 41.5% of the shares of CKH held by Nissan, to make the company a wholly-owned subsidiary. Subsequently, the company was delisted from the Tokyo Stock Exchange on May 8, 2017.
• CKH acquired Magneti Marelli from FCA in May 2019 for approximately EUR 5.8 billion. On October 1, 2019, both Calsonic Kansei and Magneti Marelli officially changed the company's name to MARELLI. The merger resulted in Marelli group sales of EUR 15.2 billion, and the birth of the world's seventh largest independent auto parts manufacturer.
• Marelli will continue to integrate its operations and reorganize under the leadership of the investment fund, with the aim of listing on the Tokyo Stock Exchange by 2022.
• Marelli Japan is one of Japan's leading major suppliers, with company-wide sales of JPY 892.1 billion yen 22,382 employees (consolidated; for the fiscal year ended March 32019). However, unlike the above top two exhaust system suppliers, exhaust system components account for only a small portion of the product line products handled by Marelli. As far as exhaust system parts are concerned, Marelli is one of the largest suppliers to Japanese OEMs, other than the above two suppliers associated with Toyota.
• Products: As the name implies, Calsonic Kansei was formed by the merger of Calsonic (formerly Japan Radiator Manufacturing) and Kansei (formerly Kanto Seiki) in 2000, with the exhaust system components originating from the former Calsonic. As a supplier resulting from the merger of two diverse companies, its product lineup includes a wide range of electronic products such as meters and ECUs, interior parts and cockpit modules, heat exchangers including air conditioning equipment, as well as exhaust system parts.
• Unlike Sango and Futaba, the top two suppliers of exhaust system parts, Marelli is noted for manufacturing metal catalyst substrates. (For metal substrates, Marelli (formerly Calsonic Kansei) is also mentioned in the section of this report entitled Catalyst related suppliers.) Similar to Sango and Futaba as described above, Marelli also manufactures exhaust pipes, mufflers, catalytic converter / canning, and other exhaust system components as well as exhaust manifolds and DPF.

Development-related :

While Marelli has not released any new exhaust system components in recent years, the company is focusing on expanding the sales of EGR coolers for exhaust systems, although technically they are considered heat exchanger products. In addition to Nissan, Marelli has been supplying exhaust system components for the Japanese domestic market to Mitsubishi Motors since before it was acquired by Nissan in 2016 and became a member of the Renault-Nissan Alliance.

Manufacturing-related :

• The Japan manufacturing footprint of Marelli for exhaust system components is primarily located at two sites in Gunma Prefecture and Kanagawa Prefecture, with the Kanagawa facility located adjacent to Nissan's Oppama assembly plant. Although there have been no significant investments by Marelli in exhaust system components in recent years, in December 2013, the company increased its stake in Siam Calsonic Co., Ltd. (Chonburi province, Thailand), which manufactures heat exchangers and exhaust products in Thailand, from 49% to 51%, making it a consolidated subsidiary.
• In September 2019, the company announced the reorganization of its manufacturing footprint in Japan. Marelli plans to discontinue operations at the Tochigi Plant and Sano Plant No. 1 at the end of February 2020, Calsonic Kansei Utsunomiya Corporation at the end of September 2020, and Calsonic Kansei Yamagata Corporation at the end of October 2020.

Hirotec

Business overview :

• Hirotec Corporation is one of Mazda's main suppliers of exhaust systems. Hirotec operates both a parts plant and a production equipment mold plant.
    Company-wide sales are JPY 87.6 billion (FY 2019) and the company has 1,903 employees (as of April 2020).
• Products: Hirotec is a supplier that manufactures mainly exhaust system components such as exhaust pipes and mufflers, as well as door panel (inner and outer).
• Customers: Hirotec supplies product for almost all of Mazda’s Japan domestic requirements. Recently, leveraging its expertise in molding technology, Hirotec is expanding its sales channels to Toyota, Nissan, and Subaru.

Manufacturing-related :

  Hirotec has 3 overseas manufacturing sites in Asia, two in China for the Changan Ford Mazda assembly plants in Chongqing and Nanjing, and one for the Ford-Mazda JV in Thailand, Auto Alliance (Thailand) Co. Ltd. (AAT). For the North American market, Hirotec supplies exhaust system components to Mazda out of its subsidiary in Mexico.

SNIC

Business overview :

• On October 1, 2014, three companies, SNIC Co., Ltd., Hamamatsu Pipe Co., Ltd., and Suzuki Kasei Co., Ltd. merged, with SNIC Co., Ltd. remaining as the surviving company.
• The company has sales of approximately JPY 68.5 billion and 1,144 employees (as of the fiscal year ended March 2019), with exhaust systems being one of its three main products.
• Products: SNIC is a supplier that manufactures automotive seats, interior trim, and exhaust system components.
• Customers: Suzuki-related

Manufacturing-related :

  Out of the company 4 plants located in Shizuoka Prefecture, exhaust system parts are manufactured at the Ryuyo Pipe Plant, products manufactured by the former Hamamatsu Pipe Co., Ltd.

Sakamoto Kogyo

Business overview :

• Sakamoto Industry Co., Ltd. is the main supplier of Subaru exhaust systems.
• Group sales are JPY 93.5 billion yen (consolidated; for the fiscal year ended March 2019), domestic sales are JPY 67.5 billion yen (72%), and the company has 842 employees in Japan.
• Products: The company primarily manufactures exhaust system components and fuel tanks.
• Customers: Sakamoto supplies product for almost all of Subaru’s requirements. Their products are also adopted in some Toyota and Daihatsu models through the alliance between Toyota and Subaru. In addition, excluding exhaust systems, the company has also delivered product to customers other than Subaru, Toyota and Daihatsu.

Manufacturing-related :

  Sakamoto is also manufacturing and delivering locally for Subaru's production needs in the U.S. as well as in Japan.

Yutaka Giken

Business overview :

• Yutaka Giken Co., Ltd. is a major supplier in the area of exhaust systems and torque converters to Honda.
• Yutaka Giken has company-wide sales of JPY 163.4 billion (as of the fiscal year ended March 31, 2020) and 6,472 employees (as of March 31, 2019). The company's overseas sales ratio is high due to the expansion of its overseas manufacturing to footprint to meet Honda's overseas production requirements.
• Products: The company's product development is focused on three areas: drivetrain, braking systems, and exhaust systems.
• Customers: About 50% of the company’s sales are focused on products supplied to Honda, the company's largest shareholder. The company also supplies exhaust system components to Suzuki.

Development-related :

• In Japan, R&D activities are driven mainly by the Development Headquarters of the Tochigi R&D Center and the Technology Headquarters of the Manufacturing Technology Division. In North America, Cardington Yutaka Technologies Inc. (Ohio, USA) takes the lead, engaged mainly in the research and development of products for the North American market.
• The company is engaged in the R&D of exhaust systems and the development of production technologies to enhance the product competitiveness of its exhaust systems and advance the development of technologies to improve productivity, addressing environmental issues such as emissions purification performance, fuel efficiency, and improved quietness.
• Developed the exhaust converter and exhaust silencer for the new Honda N-BOX, and started volume production at the Mie Plant.
• Developed the exhaust converter for the new Honda Accord, and started volume production at Cardington Yutaka Technologies Inc.
• Developed the exhaust converter and exhaust silencer for the new Suzuki Swift Sports, and started volume production at the Mie Plant and at Sumirex Co., Ltd., a domestic consolidated subsidiary.

North America :

  Among its products for the North American market, the company is developing products mainly for automobile exhaust systems.

• Developed the exhaust converter and exhaust silencer for the new Honda Odyssey, and started volume production at Alabama Cullman Yutaka Technologies LLC.

Manufacturing-related :

  In May 2018, the company announced that it had started to consider increasing the production capacity of motor components used in hybrid vehicles (HVs) and other electrified vehicles in Japan and overseas. In fiscal 2018, the company allocated about JPY 6 billion in capital investment to support new models and motor-related parts. In addition to its plant in Shizuoka Prefecture, the company is considering production in China, where vehicle electrification is accelerating.

Crefact Corporation (formerly Sankei Industry)

Business overview :

• In 2018, the company changed its name from Sankei Industry to Crefact Corporation. The company’s capital structure is comprised of 20% for Futaba Industry, 46% for Mazda, and 29% for Mitsubishi Motors. Located in Mitsubishi Motors' industrial park in Soja City, Okayama Prefecture, the company is a major supplier to Mitsubishi in the area of exhaust systems.
• Company-wide sales are JPY 26.8 billion (as of June 2018), with 419 employees (as of June 30, 2018) and exhaust systems sales account for JPY 20.1 billion (75% of total company sales).
• Products: The company specializes in stamping and other metal work, with its main production items being exhaust system parts and metal fuel tanks. The company also produces press-formed and bent products, such as cross members and water pipes.
• Customers: The company supplies product to mainly Mazda and Mitsubishi, with exhaust systems accounting for about 70% of sales.

Development-related :

  Since November 2013, the company has been supplying a new exhaust heat exchanger, the POWEREV exhaust heat recovery system for the Mazda Axela HV. Developed by Futaba Sangyo, a Toyota-affiliated company, POWEREV improves heat exchange performance by 30% compared to the conventional products, while reducing the size and weight of the heat exchanger by half. Since then, the company has been making product proposals to automakers in Japan, the U.S., and Europe for POWEREV as a functional product that improves heat exchange efficiency for vehicles such as HVs.

Manufacturing-related :

  Although the company’s manufacturing sites for exhaust system components are located only in Japan, to satisfy the needs associated with globalization, Crefact Corporation has partners all over the world, including technical alliances and technical assistance, including countries in ASEAN such as Taiwan, Thailand, Malaysia, and Indonesia, and is proactively developing a track record in China. The company is also actively accumulating expertise in Europe and the U.S.

Sankei Giken Kogyo

Business overview :

• As a Tier 1 supplier of the Honda group, in addition to exhaust system components, Sankei Giken Kogyo Co., Ltd. manufactures front exterior parts such as door sashes and bumper covers.
• Company-wide sales are JPY 105.5 billion yen, with 2,680 employees (consolidated; as of the fiscal year ended March 2019), JPY 48.4 billion (46%) of which are products sold in Japan.
• Products: Exhaust systems (exhaust pipes, muffler, catalytic converter)
• Customers: The company mainly supplies product to Honda, but in addition to automobiles, many of the products that it supplies to Honda are for motorcycles.

Manufacturing-related :

  The company has three Japan domestic manufacturing sites for exhaust system components (Isesaki City, Gunma Prefecture; Anno City, Mie Prefecture; and Hamamatsu City, Shizuoka Prefecture). The company has been shifting its operations overseas as its customers expand their operations overseas, and now has a manufacturing footprint of 12 locations: four in North America, three in China, two in India, and one each in Taiwan, Indonesia, and Thailand.

Aisin Takaoka

Business overview:

• Aisin Takaoka Co., Ltd. is one of the six major companies in the Aisin Group. The company is a manufacturer of casted parts for the Aisin Group. As a Tier 2 supplier to the Toyota group, the company primarily supplies materials for casted parts, but it also engaged in the manufacturing of products such as casted exhaust system and stamped composite products. In recent years, the company has expanded its development work to products such as exhaust systems and turbochargers with the aim of becoming a Tier 1 supplier.
• Aisin Takaoka has company-wide sales of JPY 310 billion (for the fiscal year ended March 2020) and 15,699 employees (as of the end of March 2019).
• Products: The company manufactures catalytic converters in addition to exhaust manifolds. The company's main products are casting materials for automobiles.
• Customers: Toyota

Development-related :

In the area of exhaust system components, the company is developing and manufacturing exhaust module systems that integrate exhaust manifolds and catalysts.

KIK

Business overview :

• KIK, Co., Ltd. is a wholly owned subsidiary of Toyota Motor East Japan Inc. As a Tier 1 supplier to Toyota, the company manufactures exhaust pipes for exhaust systems, as well as stamped parts for body and suspension systems.
• The company has sales of JPY 19.9 billion and 353 employees (as of the fiscal year ended March 2019).
• Products: exhaust pipes, large stamped parts
• Customers: Toyota

Manufacturing-related :

  The company has one manufacturing site in Japan (Kitakami City, Iwate Prefecture) and a satellite workplace on the Toyota Motor East Japan's premises.

Catalyst-related suppliers :

  There are two types of catalyst substrates, ceramic and metal. The closer the catalyst is to the engine, the more quickly the catalyst is activated, but in the case of four-wheeled vehicles, ceramic supports are often used because they can be located directly behind the exhaust, where the exhaust temperature rises quickly. Motorcycle catalysts are often installed in the muffler, far from the engine, using compact metal substrates, which are more resistant to vibration and provide a faster temperature rise. However, the adoption of metal substrates is increasing for 4-wheeler applications such as sports cars and other vehicles with harsh usage conditions.

NGK Insulators

Business overview :

• NGK Insulators, Ltd. is a major ceramics company that was spun off from Nihon Togyo Inc. (now Noritake Co., Ltd.), the company's namesake reflects its roots as a power insulator manufacturer, and is currently engaged in the manufacturing of industrial ceramic products as well as the world's top-selling electric power insulators. NGK Spark Plug Co., Ltd., which produces O2 sensors and NGK spark plugs, was spun off from NGK in 1936.
• NGK Insulators has company-wide sales of JPY 442 billion (as of the fiscal year ended March 2020) and 20,115 employees (as of March 31, 2019). As a Tier 2 supplier, the company supplies ceramic catalyst substrates globally.
• In April 2016, the company announced that it had formulated its 4th Five-Year Environmental Action Plan ending in FY2020. The company aims to increase sales of catalyst products by more than 60% compared to FY2013. The company plans to increase sales in this field from the approximately JPY 180 billion in FY2013 to about JPY 300 billion in FY2020. As of FY2018, the company was on track to meet their target with sales of JPY 240.7 billion, and growing steadily.
• The company produces honeycomb catalyst substrates under the trade name HONEYCERAM, as well as DPFs and NOx sensors for exhaust system components.
• Customers: The company supplies product to major OEMs such as Toyota and Nissan.

  In August 2019, the company announced that it will invest approximately JPY 6 billion to construct a new engine test building, the No. 2 Engine Test Building, at its Komaki Plant (Komaki City, Aichi Prefecture) with the aim of strengthening the development of automotive exhaust purification products. The test building will have automobile engine and exhaust gas measurement equipment and will be used mainly for the development of next-generation products, such as electrically heated catalyst (EHC). The EHC has been identified by the company as a next-generation product, which uses the on-board power source of hybrid and plug-in hybrid vehicles to preheat the catalyst and maintain purification performance. The new test building will be used to accelerate development of the product, with production targeted to start from 2023.

Manufacturing-related :

  Automotive ceramic catalyst supports are manufactured at two Japan domestic sites (Komaki City, Aichi Prefecture, and Nomi City, Ishikawa Prefecture) and the company is expanding its overseas footprint in the Americas, Europe, South Africa, and five Asian countries (China, South Korea, Thailand, Indonesia, and India). In addition to its Nagoya Plant, the company produces powder (prepared raw materials) at its manufacturing sites in Belgium and the U.S., and supplies the power to its worldwide footprint of manufacturing sites.

  In September 2018, the company announced that it would build a new powder manufacturing site to produce raw materials for ceramic catalysts at its Ishikawa plant (Nomi City, Ishikawa Prefecture), which is its manufacturing site for ceramics to purify automotive emissions. The company has invested about JPY 7 billion build an additional building on the existing site and install equipment. With the tightening of emissions regulations, the demand for ceramics for exhaust gas purification is increasing, mainly in China and other Asian countries, and the company will make preparations to ready its supply system accordingly.

Corning

Business overview :

• Corning Incorporated is the world's largest glassware manufacturer, headquartered in the U.S.
• Corning’s company-wide sales are USD 11.503 billion (FY2019; consolidated), with exhaust system components consolidated sales accounting for USD 1.499 billion (13%). And, as a Tier 2 supplier, the company supplies ceramic catalyst substrates all over the world.
• The company boasts a high level of technical expertise in ceramics such as display glass, honeycomb catalyst substrates, and ceramics such as DPF.
• Customers: The company supplies honeycomb substrates to most Japanese OEMs including Toyota, Nissan and Honda.

Manufacturing-related :

• The company is not engaged in Japan domestic production and imports all of its products.
• In May 2019, Corning Environmental Technologies (Hefei) Co. Ltd. held a ceremony to celebrate the start of production. This is the second plant that Corning has built in Hefei, China, with will produce substrates and filters for vehicle emission control systems. By 2023, the company is planning to increase its China production capacity in preparation for the start of the "China 6" emission regulations.

Tokyo Roki Co., Ltd.

Business overview :

• As the company's name in Japanese suggests, the company manufactures a variety of filters. The company is a Tier 2 supplier to Mazda for catalyst-related products.
• Tokyo Roki has company-wide sales of JPY 70.6 billion (for the fiscal year ended March 2018) and 960 employees.
• Products: Catalyst substrates and the canning of catalytic converters.
• Customers: The company supplies automotive catalyst substrates mainly to Mazda. The company also supplies product to heavy machinery and industrial equipment manufacturers in addition to automakers.

Manufacturing-related :

  Outside of Japan, the company has plants in China, Thailand and Mexico to meet the current requirements associated with globalization.

Metal substrate suppliers :

  Metal substrates are made by processing highly heat-resistant stainless steel into a foil with a thickness of 20 μm (0.02 mm) to 100 μm (0.1 mm) using a special rolling machine, before finishing the foil into the honeycomb-shaped product. This stainless steel foil material is a special composition containing a few percent Al (aluminum), which forms a stable oxide film on the surface during use and withstands a thermal fatigue environment of approximately 1,000°C. Due to its high temperature durability, low pressure loss and high temperature increase characteristics, metal substrates are used in motorcycles and other high-output gasoline and diesel vehicles.

Nippon Steel Chemical & Material (formerly Nippon Steel & Sumikin Materials)

Business overview :

• Nippon Steel Chemical & Material Co. Ltd. is wholly owned by Nippon Steel Corporation. Nippon Steel & Sumikin Materials was merged into Nippon Steel & Sumikin Chemical Corporation on October 1, 2018 to become Nippon Steel Chemical & Materials Co., Ltd. It is a metal products company manufacturing products such as semiconductor and electronics components, basic industrial components, and environmental and energy components. The company manufactures metal honeycomb catalyst substrates, not ceramic substrates, but those made of stainless steel foil, and supplies the metal substrates to catalytic converter suppliers.
• The company has sales of JPY 215.7 billion (for the fiscal year ended March 2019) and 3,147 employees. Sales for the company’s metal substrate business are not disclosed, but the company has an annual production capacity of 17 million units.
• Products: Metal honeycomb catalyst substrates

Development-related :

  In 1992, the company was the first to succeed in commercializing metal substrates. It is the only manufacturer capable of integrated production from material development to molding. The company competes with Marelli (formerly Calsonic Kansei) in the Japanese market for metal substrates.

Manufacturing-related :

  In Japan, these products are manufactured at its metal substrate plant at Nippon Steel's Nagoya Works in Tokai, Aichi Prefecture. Outside of Japan, in January 2013, the company began operating plants to manufacture metal substrates for automobile exhaust gas purification in the suburbs of Jakarta, Indonesia, and in November 2013, in Chennai, India. The company has an annual production capacity of 5 million units in Japan and 6 million units in both Indonesia and India.

  In addition to strengthening its supply system in Asia, where the demand for the metal substrates for motorcycles is increasing, the company’s Japan domestic manufacturing sites are focusing on the more difficult-to-manufacture metal substrates for automotive applications.

Marelli (formerly Calsonic Kansei)

• Products: Marelli Corporation manufactures metal substrates.
• Customers: Marelli supplies metal substrates, as well as products such as exhaust pipes and other exhaust system components, mainly to Nissan, but their metal substrates are also equipped on some Mitsubishi models.

  The following catalyst washcoat supplies are outlined below.

Cataler

Business overview :

• Cataler Corporation is a specialty supplier of the Toyota Group, and its major shareholders include Aisin Seiki, Aisin Takaoka, Aisin Chemical Co., Ltd., and Toyota Motor Corporation. As a Tier 3 supplier, it is engaged in contract manufacturing of applying catalyst washcoat to the catalyst substrate.
• Cataler has company-wide sales of JPY 270.8 billion (for the fiscal year ended March 2020), 2,493 employees (as of April 1, 2020), and Japan domestic sales are JPY 204.8 billion (75%).
• In November 2017, Cataler announced its long-term goal of raising the company’s annual global sales volume of catalysts for automobiles to 35 million units by 2025, which is about 1.6 times the current level. In light of increasingly stringent environmental regulations worldwide, the company plans to expand its business partnerships.
• Products: Catalyst substrates
• Customers: The company supplies catalysts to Toyota, Daihatsu and Suzuki. In addition to supplying exhaust catalysts, it is worth noting that Cataler supplies the fuel cell electrode catalyst installed in the Toyota Mirai fuel cell vehicle (FCV).

Development-related :

• With regards to automotive catalyst technology, Cataler developed a 3-way catalyst with NOx storage reduction functionality.
    In April 2018, the ARK Creation Center, an R&D facility, started full-scale operations in Iwata City, Shizuoka Prefecture. The center was established to accelerate the research and development of catalyst technology to create new businesses. It consists of a four-story research building, a portion of a two-story experiment building, and a four-story test building.

Manufacturing-related :

  In November 2017, the company announced that it would double the production capacity at its South African manufacturing site to fulfill new orders from European automakers. By the end of 2025, Cataler will bring the plant up to full capacity and start developing new customers in the U.S. as well. In Europe, market demand for gasoline-powered vehicles is increasing as a result of the VW diesel emissions scandal, so the company expects to increase its sales of high-value-added catalysts for gasoline-powered vehicles.

Sumitomo Metal Mining

Business overview :

• Sumitomo Metal Mining Co., Ltd. is comprised of two main businesses: the metals business and the functional materials business, which includes the catalyst business. The company is a pioneer in Japan's automotive catalysts. The company is a 50:50 joint venture between Sumitomo Metal Mining and BASF Group of Germany, and is the second largest global supplier of catalyst substrates.
• Products: The company manufactures for gasoline engines, diesel (oxidation, SCR and DPF catalysts), motorcycles, and general-purpose engines.
• Customers: The company supplies product to mainly Suzuki for automobiles.

N.E. Chemcat

Business overview :

• N.E. Chemcat Corporation is a 50:50 joint venture between Sumitomo Metal Mining Co., Ltd. and the BASF Group of Germany. The company operates as a Tier 3 supplier, mainly to Japan domestic manufacturers, and is engaged in the contract manufacturing of applying catalyst washcoat to catalyst substrates.
• N.E. Chemcat has company-wide sales of JPY 55.8 billion and 631 employees (consolidated; as of the fiscal yeard ended March 2019).
• The company is the second largest supplier of catalyst substrates in the Japanese market following Cataler.
• Customers: The company supplies catalysts to all eight major passenger car manufacturers in Japan. The company has the largest share of the market for Nissan, Honda and Fuji Heavy Industries. As a result, the company remains the second largest supplier of catalyst substrates, following Cataler.

Manufacturing-related :

  The production of gasoline catalysts, which was conducted at two locations in Ibaraki and Shizuoka, has been consolidated in Ibaraki since 2016. At the same time, the company has increased the production capacity of diesel catalysts in Ibaraki to 2.5 times the current capacity. Although the number of vehicles manufactured in Japan is declining, the company has optimized its production system to meet growing demand for diesel catalysts as a result of increasingly stringent emissions regulations in Japan and abroad.

Johnson Matthey

Business overview :

• Johnson Matthey plc is a UK-based chemical manufacturer specializing in catalysts, fine chemicals and precious metals; as a Tier 3 supplier, the company is engaged in the contract manufacturing of applying catalyst washcoat to catalyst substrates.
• Johnson Matthey has company-wide sales of GBP 10.745 billion and has 13,399 employees (consolidated; for the fiscal year ended March 2019). Consolidated sales of exhaust systems were GBP 2.72 billion (25%) of total sales.
• Customers: The company main business in the Japanese market is to supply catalyst substrates for Suzuki and Honda. The company has won a lot of business in Asian markets, including China, as well as in Europe and the U.S.

Manufacturing-related :

• Previously, the company's only market in Japan was import sales, but with the expansion of sales in the Japanese market, the company opened a plant specializing in automotive catalysts with a technical center in Tochigi Prefecture in 2004.
• In July 2018, the company announced a groundbreaking ceremony for an automotive catalyst plant in Jiangsu Province, China. The plant covers an area of 50,000 square meters. The plant will supply products to help customers comply with "China 6" emissions regulations as part of the global trend of increasingly stringent automotive emissions regulations.
• In July 2018, the company announced that it held a groundbreaking ceremony for its plant in Gliwice, Poland, to manufacture cutting edge automotive catalysts. The new plant, with an investment amount of GBP 1 million, is expected to be the largest plant in the region, with an area of over 25,000 square meters.

Umicore Shokubai Japan

Business overview :

• Umicore Shokubai Japan Co., Ltd. is a joint venture between Umicore SA, a Belgian materials manufacturer, and Nippon Shokubai Co., Ltd., a Japanese chemical company (Umicore: 60%, Nippon Shokubai: 40%).
• The company is a joint venture established in 2012, specializing in automotive catalysts.
• In Japan, about half of the company's sales are to Mitsubishi, followed by Nissan.

Development-related :

  Umicore's manufacturing and sales offices in North America, South America, Europe and China are used to provide technology and products to Japanese automakers worldwide.

Manufacturing-related :

  The company has a manufacturing site and R&D facility in Himeji City, Hyogo Prefecture.

Nissan

  In addition to the above suppliers, Nissan also has an in-house catalyst substrate department, although its annual production volume is less than 100,000 units.

The following table is a list of the major suppliers of exhaust system components and their customers (Japanese automakers)

Note:
1) P: Exhaust Pipe, M: Muffler, Cr: Catalyst Substrate, W: Washcoat, Cg: Canning
2) The list includes sibling and consignment models manufactured by other companies, but does not include models supplied on an OEM basis.

Exhaust System

Muffler

Catalytic converter

Note: Values in ( ) represents the indirect ownership percentage, and along with the joint venture/partner is the investment percentage held in a subsidiary.